Listen with Brian from Imbassy
Marketing Mix Models (MMMs), are a time-tested method for measuring the impact of your marketing and developing more well-informed strategic plans. However, in order to continue to access useful planning insights, businesses must adjust their models to account for the impact COVID-19 has had.
How unexpected events impact marketing mix models?
Marketing mix models amalgamate historical data into patterns and trends that can then be used to make predictions about channel performance. This is usually an essential practice for many leading brands, however, the COVID-19 outbreak has changed consumer and business behaviors and disrupted marketing across the globe. Even looking back on relatively recent data often can’t fully account for this impact.
Accounting for disruptive events in MMMs
I have seen many “Marketing Guru’s” lately that have been preaching that MMMs are a thing of the past and that COVID is proof of that, I believe that rather than abandon MMMs altogether, we should be seeking to adapt our models to account for these disruptive events.
1. Account for changes in consumer behavior.
Running MMMs more frequently allows you to include more recent data, which helps ensure your businesses output reflects the rapidly shifting digital environments. As marketers, we should be considering the long-lasting implications of consumer behavior; for example, e-commerce sales may remain higher than pre-pandemic conditions if there is a more permanent shift in how consumers are purchasing.
2. Include more granular data.
By using more granular, precise data, such as data focused on specific geographies will result in much more targeted insights, especially in unusual times. Marketing solutions must focus on how COVID-19 has affected specific markets and how that correlates with the brand’s category and vertical. By using granular data, such as daily, campaign-level, geo-region, direct marketing area (DMA) level data, businesses can better understand the impact of evolving consumer behavior.
3. Consider how creative quality and media type impact performance.
Ad campaign quality can drastically vary, meaning not all impressions are of equal value. However, as mentioned before, typically MMMs don’t account for creative quality and media type. This issue is especially important right now, as most businesses have shifted their creative strategies such as updating copy and using different imagery in response to COVID-19.
4. Calibrate and validate MMMs.
Constantly running experiments helps businesses check their assumptions, choose the correct models, test against known outcomes, and tweak their MMMs in order to make them more accurate. When there is increased scrutiny on marketing budgets or less relevant historical data to reference, calibrating marketing mix models with experiments is not only an effective but essential way to ensure models are as accurate as possible. I am always encouraging marketers and business owners to look at their marketing efforts holistically.
5. Adjust optimization and scenario planning.
It is important to remember that current audience behavioral patterns may not indicate long-term trends. Businesses should evaluate findings from high-impact periods of the pandemic to determine if these should be included in planning.
While marketing mix models are a time-tested method for measuring the impact of your marketing and developing more well-informed strategic plans, they may need to be adjusted to account for disruptions and unexpected events, such as the COVID-19 pandemic. Accounting for changes in consumer behavior, including more granular data, calibrating marketing mix models with experiments, and adjusting scenario planning is key to adjusting models to account for the pandemic’s impact.